Some advice for Turnbull on the NBN: move on

The sooner Turnbull stops contesting the 2013 election, the sooner everyone can begin to benefit.

AAP

Labor's implementation of the NBN wasn't perfect, but rather than continuing to snipe at his predecessors, Malcolm Turnbull needs to start addressing his own shortcomings, writes David Braue.

Given that it's nearly a year since the Abbott Government swept into power, you might assume that its ambitious plan to overhaul the National Broadband Network (NBN) had already begun to significantly speed up the rollout.

You would be wrong.

Indeed, as we near the first anniversary of Malcolm Turnbull's time as Communications Minister, the release of Bill Scales' audit report into Labor's broadband policy process is a reminder that Turnbull is still happy to keep fighting the election with endless reports supporting the Coalition's increasingly untenable NBN policy.

Like the ongoing Michael Vertigan-led cost-benefit analysis and earlier NBN Strategic Review (NBNSR) - both designed from the start to substantiate Liberal election rhetoric - Scales' 186-page Independent Audit: NBN Public Policy Processes is unabashedly critical of Labor's work to reinvent Australian telecommunications, famously describing the 11-week process of policy development as "rushed, chaotic and inadequate".

Many of its criticisms are correct: as has been widely accepted, Labor under Kevin Rudd was all of those things. Current Labor MP Jason Clare has been forthcoming with the mea culpas on Labor's behalf, but correctly challenges Turnbull to do better.

The Scales report, however, says nothing about the rank hypocrisy of attacking Labor's 11-week policy development, but then saying nothing about the fact that the NBNSR - which concluded that a multi-technology mix (MTM) NBN was the best option for Australia and which has been feted by Turnbull - was a whirlwind project executedin just five weeks.

Also contradicting the Scales report's assertions is the fact that the NBNSR has been subjected to no substantive review or appraisal - apart from that offered by the Labor and Greens-dominated Senate Select Committee on the NBN in an interim report in March (that critique was resoundingly and unsurprisingly rejected in May by Turnbull in yet another show of partisanship overcoming evidence-based debate).

Despite Turnbull's rhetoric about improving the rollout, new FTTP customers are barely being connected any faster than they were before the election. In the 10 weeks to the election, Labor's rollout was connecting an average of 4270 brownfields premises per week, while during the past 10 weeks the average is 4651.

Brownfields activations are gradually trending upward as FTTP demand increases. But even under Turnbull's watch the rollout is miles away from the 25,000 per week rate for total connections - including brownfields connections - to the NBN that chairman Ziggy Switkowski recently admitted is necessary for the Coalition to meet its rollout targets.

Little wonder that on June 30 the NBN Co effort cruised past revised year-end targets that were about as taxing on the company as it is for you to get out of bed and put on your slippers. Expecting admiration for passing such a wan target is like a restaurant worker expecting to receive the Nobel Prize for Medicine for washing his hands after using the toilet.

What Turnbull is not talking about are the ongoing and massive problems with his own policy, which is showing increasing signs of trouble, no matter how enthusiastically he attacks Labor.

Consider that one of Turnbull's first decisive investments - an April contract securing additional interim satellite broadband capacity until the launch of Labor-purchased and Coalition-reviled satellites next year - has not only not seen new subscribers, but has overseen a net reduction in the number of satellite NBN customers activated, from 44,447 on January 19 to 42,407 at the end of July.

While some read this as an effort to kick-start FTTN, the move in fact hid a much more insidious goal: the eradication of a competitive threat to the NBN that was posed by large internet service provider TPG Internet, which has tired of waiting for the NBN and is rolling its own fibre-to-the-basement (FTTB) services into apartment buildings around the country.

It became clear that Turnbull issued the revised Statement of Expectations to enable the government-backed network builder to fast-track a competitive response - the delivery of fibre-to-the-basement (FTTB) services, due within months, that have been both designed and fast-tracked to squash TPG's rollout. NBN Co's "commercial response" was originally due in October but has been pushed back to early 2015.

These and other actions by Turnbull suggest that he is so determined to deliver his watered-down NBN on his term that he remains quite happy to sacrifice the very idea of a free, competitive telecommunications market that was enshrined in legislation back on July 1, 1997 - and reflects the light-touch policymaking that has long been a Coalition cornerstone.

Yet Turnbull continues to reach for even higher peaks of self-contradiction. Even as he works to discourage private-sector network builders from investing in infrastructure that might be better than his middling MTM NBN, Turnbull has not only fumbled the Government's relationship with Telstra, but empowered it in ways that even Labor never would have imagined.

What may turn out to be Turnbull's biggest mistake came in late June, when he proudly proclaimed that the government had agreed to pay Telstra $150 million to deploy FTTN to about 200,000 homes and businesses, mostly in regional areas.

On the surface it might sound like a policy success, but Turnbull's decision effectively hands the reins of his NBN policy back to the one company whose influence Labor and the entire industry have long understood needs to be attenuated, not increased.

Turnbull went to the election believing that Telstra would give the government its copper access network (CAN) and that this would happen through slight adjustmentsto the $11 billion Telstra Definitive Agreement that Labor negotiated. A year later, the negotiations continue and there is no sign that NBN Co's ultimate goal - the ownership of Telstra's CAN, which chairman Ziggy Switkowski foreshadowed earlier this year - is imminent or even achievable.

Now that Telstra knows the government will pay it handsomely to rent its network in perpetuity, the monopolist-turned-capitalist has absolutely zero incentive to sell. The thing is: without guaranteed access to the CAN, Turnbull's fibre-to-the-node (FTTN) dream is nothing more than a pallid thought bubble.

Thanks to Turnbull's enthusiasm to implement FTTN, Turnbull has allowed Telstra to put him, the NBN effort and the entire Abbott Government over a barrel. Pro-Telstra statements from Turnbull - who has recently warned the ACCC against reductions in Telstra's access pricing - and calls for reduced regulation from emboldened Telstra CEO David Thodey give an insight into the power dynamic at the negotiating table.

Faced with the reality that private-sector telecoms operators simply do not work the way he imagined they do - and the way he sold it to the Australian public - Turnbull has gone to ground on the NBN, still talking about Labor's mishandling of the NBN.

What most Australians want is results, and those who are willing to take the time to critically assess the effort will see that that the nearly year-old government has yet to produce strong results on the NBN. With the cost-benefit analysis due to drop last month but now expected, well, some day - and with the private sector well and truly scared away from investing in new networks - the Coalition's NBN truly is in no-man's land. The sooner Turnbull stops contesting the 2013 election, and instead addresses the glaring problems in front of him, the sooner everyone can begin to benefit.

Technology journalist David Braue has been covering the telecommunications industry since it was deregulated in 1997. Follow him on Twitter at@zyzzyvamedia. View his full profilehere.